Cabinet ministers fear Budget 'car crash' as pressure mounts on Philip Hammond

Posted On: 
14th November 2017

Cabinet ministers fear next week's Budget will be a "car crash" as Philip Hammond comes under mounting pressure to turn around the Government's fortunes with a voter-friendly spending package.

Philip Hammond is under pressure ahead of next week's Budget
PA Images

Frontbenchers at odds over Brexit are united in their opposition to the Chancellor's approach, senior sources have told PoliticsHome.

Mr Hammond will deliver his Budget on 22 November amid gloomy predictions about the state of the public finances.

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The influential Institute for Fiscal Studies warned last month that he was "between a rock and a hard place", with political pressure to ease off on austerity while economic growth slows and the national debt continues to rise.

As well as finding cash to lift the public sector pay cap, Mr Hammond is also preparing to cut stamp duty for first time buyers and come up with millions of pounds to train up construction industry workers to help tackle the housing crisis. Campaigners also want him to freeze fuel and alcohol duties, a move which would cost the Treasury millions.

However, the Chancellor is thought to be resisting calls by Communities Secretary Sajid Javid for the Government to borrow some £50bn to fund more housebuilding, with the Treasury apparently concerned it will add too much to the national debt.

Mr Hammond is also haunted by the memory of his last Budget in March, when he announced a rise in National Insurance Contributions for self-employed workers, only to be forced into a humiliating climbdown a week later.

One Cabinet minister said: "I fear that the Budget could be a complete car crash, a real disaster. There is so much riding on it, but look at what happened with the last one.

"The problem with Philip Hammond is that he has no idea about politics, so he doesn't factor that in to the decisions he makes. People try to explain how the choices he makes have a political impact, but he doesn't listen."

A letter from Boris Johnson and Michael Gove to Theresa May criticising Mr Hammond over his approach to Brexit was leaked to the Mail on Sunday last week.

The pair wrote that Britain was being held "over a barrel" by the Chancellor's refusal to make preparations for leaving the EU without a deal.

But an ally of the Prime Minister told the Daily Telegraph: "It's a sordid little double play, they are trying to take advantage of the Prime Minister's weakness to get rid of Hammond."

"The one thing that unites Brexiters and Remainers in the Cabinet is that they don't like Philip Hammond," said one minister.